Page 108 - The Magic of Tiny Business

Chapter Six  Tiny Business Is Lean Business

have a crystal ball but I do know that if you
understand your numbers and how those numbers
impact results, you will almost always improve
your odds for success. And I also know that even if
you have an instant hit in spite of flying blind,
sooner or later you will get into trouble if you don’t
know how your business operates numerically.”

To build a business within reach of what you want,
you must keep it within reach of reality. This chapter is all
about how to do what I didn’t do at first but that I do now.
Largely because of Mac, who helped me to really get to
know my numbers.

Cash Flow and Access to Cash

What’s enough cash flow? What’s your baseline? What-
ever the number is, it should be tied directly to your level
of confidence with sales and expenses, based on history,
with projections and unknowns gathered through rela-
tionships you make and nurture. So much of running and
building any business comes in the bits and pieces of infor-
mation you gather in formal and casual exchanges. You
can’t know everything, but you can know enough to make
a decision or know where you need to go to get help.

The big key to cash flow is knowing and mapping out all
your known expenses—typical and atypical, current and x
months—in advance against a forecast with historical figures.
When you start you may not have a history to reference,

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